Investing All Your Money in One Company Is an Example

question 34

Multiple Choice

Investing all your money in one company is an example of:

• A) risk diversification.
• B) risk pooling.
• C) risk aversion.
• D) None of these statements is true.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for products or services delivered on credit.

Current Liabilities

Financial obligations or debts a company is expected to pay within a year.

Inventory

A complete list of items, such as goods in stock, held by a business to fulfill customer demand.

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated by dividing total liabilities by total assets.